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You are a policy analyst trying to estimate the relationship between test scores and spending on education. You observe that Alphaville spends $5,500 per

 

You are a policy analyst trying to estimate the relationship between test scores and spending on education. You observe that Alphaville spends $5,500 per student and averages 76 on a national test. The neighboring Betaville spends $4,500 per student and averages 84. A new mayor is elected in Alphaville and she raises educational spending to $6,500 per student. Test scores rise to 84. Use the data from Alphaville alone to estimate the (midpoint) elasticity of test scores with respect to educational spending.

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